Shares of Rail Vikas Nigam Limited (RVNL) surged 4.1 percent on Friday, March 3, after the company, along with Russia's Transmashholding (TMH) as a joint venture partner, emerged as the lowest bidder for a ₹58,000-crore contract to manufacture and maintain 200 Vande Bharat trains.
"RVNL emerges as the Lowest Bidder (L1) for 'Manufacturing cum Maintenance of Vande Bharat Trainsets including Up-gradation of the Government Manufacturing Units & Trainset Depots' in JV with following JV partners: Metrowagonmash (70 percent); Locomotive Electronic System (5 percent); and RVNL (25 percent)," the exchange filing stated.
During Friday’s trade, the stock opened at a price of Rs. 66.90 per share against the previous close of Rs. 65.65 per share and grew further during the early trading session to touch an intraday high of Rs. 68.40.
However, the stock failed to hold onto this rally and was trading at ₹65.95 apiece, up by 0.46 percent, at 11:20 a.m. on the NSE.
The stock touched a 52-week high of Rs. 84.10 on November 29, 2022, and a 52-week low of Rs. 29.05 on May 21, 2022, indicating that at the current level, the stock is trading over 127 percent above its 52-week low and 21.5 percent below its 52-week high.
The stock has grown almost 100 percent in the last six months. Moreover, in the last one year, it has yielded a return of nearly 112 percent. In the past five years, it has gained over 233.3 percent.
India's state-owned Rail Vikas Nigam Limited outbid Bharat Heavy Electricals Limited (BHEL)-Titagarh Wagons to bag the contract for the production and maintenance of 200 Vande Bharat Express trains.
RVNL quoted a price of ₹140 crore per train set, indicating its keenness to enter the Indian market.
Other contenders in the fray included French railway major Alstom, the Medha-Stadler consortium between Swiss manufacturer Stadler Rail and Hyderabad-based Media Servo Drives and Siemens along with BEML.
The contract is worth ₹58,000 crore and involves producing trains using existing technology developed by Indian railways, staff and factories, with their maintenance over the next 35 years.
The Indian government had set an ambitious target of manufacturing 400 semi-high-speed Vande Bharat trains, consisting of 16 self-propelled coaches, by the end of 2024-25. This initiative was announced in the Budget for 2021-22 and will eliminate the need for a separate locomotive.
RVNL is a special purpose vehicle (SPV) engaged in undertaking development projects. The company executes all types of railway projects including new lines, doubling, gauge conversion, railway electrification, metro projects, workshops, major bridges, construction of cable-stayed bridges, and institutional buildings.
According to a MintGenie poll, 3 analysts on an average have a ‘STRONG BUY’ call on the stock.